Use fund managers, not ETFs in emerging markets
Exchange traded funds (ETF) should not be used to gain exposure to emerging markets, according to chief investment officer at JBWere, Giselle Roux.
Speaking at the NAB Private Wealth conference in Melbourne, Roux said emerging markets investing requires strong skills, knowledge and hands on experience to move from one area to another.
NAB would strongly encourage investors to use a fund manager rather than an ETF, or try to stock pick their way through, Roux said.
Investors have to be prepared to move their investments around the different regions because emerging markets are relatively narrow, she warned.
Sometimes they can become overvalued, and sometimes the best stock may not be in India or the Philippines but in Taiwan, she said.
It is critically important to have fund managers to think their way through which stocks and regions are performing best or have the the best valuations, she said.
The emerging world has been one of the weaker performers in recent times, she said.
Roux also warned that any move out of cash and into equity needs to be on a considered basis.
Investors have to be prepared to take on capital risk in equities, and must be comfortable with the volatility risk and be certain that there will be dividend payment, she said.
You need to be rewarded in terms of the uplift and return on yield before you rush into a yield story, she added.
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
